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tv   [untitled]    October 11, 2012 11:30pm-12:00am PDT

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couple of minor medical emergencies and one took place on the jeremiah and we responded to the vessel while afloat and we were able to take the individual back and connect with a land side ambulance and get him to the hospital and we are proud of how things worked in a very intensive situation and we are looking to after action reports and comments from the public at large, but generally speaking very, very pleased with how it went but we would have liked the outcome of the giant's games and a's games to be different but otherwise it was a tremendous weekend and there is probably about a thousand port and city staff that need to be thanked. many of them posted themselves at the waterfront all weekend long and several with the real estate division and here today so you know who are you and thank you for that and
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as well as our maritime division that worked around the clock and homeland security division that worked around the clock so we are appreciative of all the work that went into this and we look forward to doing it again next year so thank you everyone for that. lastly i just want to take a few minutes to recognize frank alito that passed away. he was worn to the fisherman wharf's area in 1929 and he passed away earlier this month on october 2. frank and his brother had business arrangements throughout fisherman's wharf and not on port property but they were a fixture in the area. frank went galileo high school and went to
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the war and when he came back they opened the family business and opened up the alito fare restaurant and a dining room known as the captain's cabin and later went into other adventures in the fir fisherman's wharf area and recently participated in the merchant's association. there will be a memorial mass held on october 11 at st. peters and pauls church at 666 fill pert church and in lieu of flowers the family asked for donations made to hos pies and we have that information if anyone would like it and i would like to thank frank for his contributions the area and if
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we adjourn in his memory today. >> thank you. before we go to the reports i want to thank the port staff and everyone that helped this weekend and the various events. we went on the ship friday night and we actually did watch the blue two angels and wched it from two places and i wasn't on the embarcadero and seemed to work well and i want to thank the port staff for their great job this weekend as well and give us confidence what we will see next year for the finals and the america's cup and i wouldn't be surprised if they said let's do it on the same weekend as fleet week again and it would be much.
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>> i echo the comments of my colleagues and was around the city and bumped into them and they were working hard and we owe you a great deal of thanks making this weekend come off so l i think i said at the last meeting this would be a real test and once we got through it and next year's america's cup will be a piece of cake hopefully and i want to thank the city family and staff and coordinating and working together and that in large measure made it work well and the coordination with muni and setting up the bicycle lanes and other modes of transit. i took muni to get down here and was amazed how easy it was and smooth and as director moyer said everyone was having a good time so that was nice to see and the tourists and everyone else enjoy tg and the weather held
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up too and thank you to the staff. it was above and beyond and thank you. >> is there any public comment on the executive director's report? >> hearing none. >> items of the consent calendar. 8a is authorization for proposals and the hazardous waste services and execute annexation of pier one and san francisco special count tax district and san francisco sustainable financing and payment for the port commission of the pro rata share of special taxes, a sub tenant with the pier and llc. >> motion to approve. >> motion. >> second. >> is there any public comment?
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hearing none all in favor. >> aye. >> aye. >> resolutions 1275 and 1276 have passed. >> item 9a informational presentation on the port planning studies associated with approval of the pier 27 james r. herman cruise terminal and each wharf terminal project. >> good afternoon president woo ho, members of the commission. i am diane oshima with port and planning division and i wanted to give informational overview of planning studies that the port and p dc will commences towards the end of this year. i saw joe step in and i want to
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acknowledge him as well. the port and they have a long history of working together, and commissioner adams you weren't here before, but let me just give you a brief background. as part of the pier 27 james r. herman cruise terminal project. it went through the process. it required amendments to their special area plan, san francisco waterfront area plan because there were exceptions associated with that project that didn't meet with the current policies of that plan, and we had approached that process before the america's cup project came to play. when america's cup project came into play we ended up basically not having enough time to do all of the planning work that we would normally do
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to try and reconcile those policy issues in the context of getting approvals for the pier 27 project and with the cooperation of them and the public we were ultimately able to get approvals from b cdc in the form of amendments to the plan as well as a major permit for that project which included conditions that require the port and them to work together on planning studies to further address the outstanding issues that we were not able to address when that pier 27 project was going through, so to that end this informational presentation is just to give you a look forward as to what those planning studies are, and then to give you a schedule of what the next steps are. b cdc commission received similar informational presentation last week so we wanted to make sure
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the commission our public had the benefit of that as well. melissa could you turn on the -- thank you. briefly this image here is a snapshot -- actually not completely up-to-date but it's fine for the purposes of the presentation today in terms of identifying what is known as open water basins within the special area plan. those are the four blue colored areas shown here between pier 27 and the ballpark and the south beach harbor. those open water basins in the plan are intended to be permanent open water areas that are either in place now or are to be created, so that from a b cdc standpoint there is always a place where there is open water and public views and venues
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around that open water basin to be able to provide that to the public. the open water basin next to pier 27, the wharf open water basin and the plaza was the basin that we had to seek exceptions to for the pier 27 project. essentially the planning studies that are required really focus on four specific areas. one -- actually i will start with the second bullet first. the replacement of open water basin between pier 35 and china basin. because there are attributes about the pier 27 project that do not meet the open water basin requirements within that pier 27 area we're required to work with the community on a public process to identify a replacement open water basin
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between pier 35 and china basin channel. one of the other requirements of the study is a third bullet down, the capital strategies for embarcadero resources and involves a survey of all of the historic piers within the embarcadero district to identify what their condition is and the priority for either rehabilitating repairing them or removal of them and this would address some of the interest in removing fill in the bay so they have an interest in having the port really identify what their outlook is and it will involve also a financial strategy for making any kind of commitments. we would have to realistically look at the resources are in order to support that, so we can take into account the current
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capital and financial situation the port is looking at . the last bullet is balancing maritime and public access needs. when we look at retaining piers we're looking at opening up opportunities for public access, but we're also mindful of the berkting needs of the various maritime uses along the waterfront so one of the things we will look at in terms of the pier values are will be the maritime uses as well as the public access opportunities, and if i jump back to the first bullet, and the fisherman's wharf area and a special study they have called out that one of the studies is for us to take another look at that special study area to identify whether we can create an open water basin in that area too north of
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pier 35, a plaza area as well, and with that we're able to identify those kinds of public resources we will be able to lift some other policies that right now are impeding our tenant's abilities to maintain substructure and the restaurant uses in that area, so that process is somewhat separate, but it will also have some implications for the overall scope that we're taking for the northern half of the waterfront north of china basin channel. to do that work the port and b cdc staff have started developing the tasks and the work program to carry that forward. this is just a general timeline how we propose to carry out the work and we envision convening a working group that
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would be developed by the b cdc and port staff with to reach out to that committee. it would involve the environmental interest including "save the bay" and a strong constituent of b cdc in particular as well as the port. we will be working with this group and other stakeholders as well throughout the process. we hope to that have working group convened by the end of this year and have the first meeting either in december or january and convene a series of workshops with them to pose the questions of the four planning studies that i just described such that the port staff and b cdc would end up able to come up with some recommendations at the end of that process. i think
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some of the questions that we will be oppose in the course of these planning studies may raise other questions about priorities for the port in terms of how it should be addressing its update of the ten year capital plan as well, so there are multiple benefits in terms of reaching out to the community at this point to get that information. we do intend on not just looking at the narrow confines of these planning studies but also to take the larger waterfront issues into account as well, so hopefully we will be able to provide quarterly updates to the commission just to keep it abreast of the progress that we're making prior to coming up with recommendations at the end of next year, so with that i just wanted to make sure that the port commission was aware of what we were doing on that front, and if you have any questions i am happy to answer
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them. >> thank you diane. any public comment? commissioners, any questions? thank you. >> thank you. >> item 9b request approval of the first amendment and executive negotiation agreement between the board of san francisco and the associates and for the lease of property listed and on rock street and san francisco bay and adjacent to at&t park. >> thank you. good afternoon. phil williamson and project manager in the port's management group. as a re-cap the port commission awarded development opportunity to this group and in september of 2010 the port entered into an exclusive negotiation agreement for the mix used development of the
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area which are located across china basin across from at&t park. this outlines a two phase approach. phase one is for 30 months for the parties to reach an agreement on the financial plans and terms and approval from you on the sheet. and phase two is to complete the permitting process and culminating in the lease at that time. this past march the developer submitted a revised proposal for the site and over the last several months port staff as long as with the office of economic work development and the developer have been working intensely with the community and other city agencies to advance creative land use and tools for the project. the proposed land use program requires approximately $66 million in
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developer equity for entitlement costs and other costs and concerned increase for the site. and staff will continue due diligence to hone the tools and the impact before including them in the project sheet we plan to bring before you later this year. the complex of the negotiations and due diligence and lengthy coordination has required excess amount of time when this was initially agreed upon. as a result you're being asking to approve the six month extension for the benchmarks and to march of 2013. this extension would provide needed
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additional time to reach agreement on the additional use of finance tools now investigated to incorporate these tools into the project term sheet and then to obtain your approval of that term sheet and the board's endorsement of that sheet and that would happen between now and march of next year. i would like to bring to your attention the llc signatory to this and they're represented equally by the companies and giant development services. the document between these entities acknowledge cornish will withdraw from the llc and assign its membership rights to giant development services should a term sheet not agreed upon by a daughter mutually agreed by the parties. port and staff have
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been informed by giant development services and they have withdrawn in accordance with the terms of the agreement. the two parties remain in talks for a future role. giant development services is the soul member remaining for this. port staff believes that either way the team in place constitutes seasoned development professionals and capable of successfully shepherding the project through phase one and gaining approval of the project term sheet and that concludes my presentation. thank you. >> thank you. any public comment? do i have a motion to approve? >> move to approval. >> second. >> any questions commissioners before we vote? all in favor? >> aye. >> aye. >> thank you. number 1277 as
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passed. >> thank you very much. >> item 9c requests approval of term sheets pier 70 historic buildings opportunity with o den incorporated. >> good afternoon commissioners. kathleen from the planning and development group. i am here today to ask for your approval of the transaction terms for the orden project at pier 70. in today's presentation i am starting from the assumption we know where pier 70 is and focusing on this project and realize this is one of many presentations we have given to the board and i am focusing on
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the business terms and where we are now. i am excited to report we have reached a conceptual agreement with them. what it is a five, six pages of business terms that we agreed to that will cast the formation of what will end up being a substantial document in front of you we hope early next year. the process now is if you approve this today we then take it to the board of supervisors and then we dive into the next level of project review. this term sheet endorsement and board of supervisors endorsement is really important because we don't want to dive into all of that until we make sure that the policy makers are on board with us, so these are the buildings. they are -- the project is tied to these specific buildings and pier 70 and we will work with the bigger project but this project can move forward before because we need to because
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these are amazing buildings as we told you before, and because we think we have a qualified term to bring these forward. again the process to date has been -- this is my fifth time at the dais this year on this project and we hope to be back before the end of the year. we have been to the central waterfront advisory group three times on this project and gotten a lot of feedback and gotten a lot of support clearly identifying the importance to the community of saving these buildings and the importance of us doo this well and coordinating with the rest of pier 70. what we're doing is rehabilitating the six buildings, the office buildings, the two on the northern side will be used as office and doing different things that the steel company did but used in the same manner and this power house building to commercial use and
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the south side of 20th street extension of the economy in the area right now and light industrial, arts and recreation and the things that are making that a cool hot new area and we can accommodate that growth. we think this will be jobs for 400 to 500 people. one of the things to recognize this project is important to the port for quite a while. a decade ago we were in contract with other entities to do this and tried to make this project happen. we carry $109 million in the capital plan to do these buildings. we have a project before you today where the orden development group would take the lead and invest their funds and realize this. one of the reasons -- the high level reasons we think this can succeed at this point. one is we brought the capital costs down for a number of reasons and one is the specialized
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expertise in saving the buildings. this is a strong market interest. they have shown interest to the capital and put their equity on the table. one of the things the buildings will bring is historic tax credit and equity and low expense equity to the project and we have designed a participation rent structure where the port's income is behind some of the other equity and other investors so that we can bring more of the money to the table and because of those reasons we can do the project now and not wait to invest substantial public money into it as we once thought. overview of the business trends. odi in the term sheet has agreed to invest $14 million of their equity in the project. the port is putting 1.5 million and that is money we budgeted and planned and we were going to spend
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money to prop up the buildings because we didn't think we could get to it in time. we put those on hold and we are going to contribute to the full rehab. the participation deal works that the net revenue after paying the debt service and the costs will first flow back to the odi entity to repay the equity that invested and 14% return on that equity. once their equity is repaid we share in the net and the port also has participation in the refinancing and sales proceeds, so we are holding back on our income, but that lets us bring the other less expensive costs to the table. it's our hope to minimize the amount of the 14% capital but we have as a back stop the commitment to have the money there to get the buildings
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done. so we have also introduced into the deal a port base. this is the nuance that is different from what the odi team proposed when we talked about this in january and february. in 20 years there is a base rent proposed and $200,000 escalated by cpi and in 20 years it's something like $400,000. at that point odi will pay the greater amount so even if they haven't burned off all of their equity we get the base rent. if we're doing really well and the participation and 50% share the net is above that we get that. the term sheet has provisions that might delay when the base rent comes in if we find in the next round of due
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diligence we need it and here is the projection over the three cases what the revenue would be. the base case scenario is what we think now at $58 million project cost what the port's income would be so the yellow arrow shows by this time the equity is paid off and we're getting 600,000-dollar a year of income. the blue arrow -- that's the red line. the blue arrow, that's the point where the 30 year mortgage is paid off and our income would jump. typically people don't last out the 30 year mortgage and refinancing happens but this will sustain us along the way. the other two areas are looking at what if the team had to put up to 14 million, either because the costs were higher or the income was lower than expected and we couldn't bring as much in, so in those cases after 20
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years and where the bigger black arrow kicks in and brings revenue into the port even before all the equity are paid back and if we get the little bumps along the way and escalation in base rent and once the mortgage is paid off and pay off the equity the income jumps and worse case we get some rent in 20 years and base case at 2021 and assuming the construction we're at this point. i wanted to point out the buildings -- we get no income from now and in fact we incur security and maintenance costs. a couple of additional highlights and all of the work is done with the historic buildings and some of the important buildings and
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